I kicked off my Distributech week in San Diego by touching down and heading straight for a pre-event meeting organized by the Smart Grid Consumer Collaborative (SGCC) – a non-profit organization pulling together a diverse membership of utilities, vendors, other industry associations, and consultancies to share information on smart grid adoption and consumer attitudes. Today’s meeting centered on the release of the group’s new State of The Consumer Report which will be available shortly on the SGCC site. As a compendium of over 80 industry studies conducted by the likes of Accenture, Best Buy, IBM, and others it is sure to be a valuable reference document for anyone exploring the consumer side of smart grid.

What is clearly evident from the report itself and today’s discussion is that there is not one smart grid consumer – there will be tech savvy and eco-friendly early adopters, aggressive resistors, cost curious experimenters, and likely an ambivalent majority. To me, this segmentation means that smart grid consumers are, well, no different than consumers of virtually any other consumer product. Segmentation is a way of life for marketers of everything from televisions to toothpaste. Yet, for utilities, rate payers have generally been one homogenous …

The state of Massachusetts can be characterized by internationally strong industry clusters, a significant and growing venture capitalist base, the highest R&D spending in the US, and world acclaimed universities. With that backdrop, the City of Boston is at the heart of the cleantech movement in Massachusetts. Here are the top ten reasons why Boston, Massachusetts is ready to take its place in the forefront of the cleantech revolution.

1.The New England Energy Council
Venture capitalists, major financial institutions, clean energy industries and associations have paired with local colleges and universities to become a community of nearly 150 stakeholders determined to make Boston a world-class leader in clean energy. The Council regularly convenes clean energy CEOs and provides training, education, and policy assistance to industries in the greater Boston region.

2. Massachusetts Institute of Technology
With support for student driven innovation, MIT’s Clean Energy Prize provides $200,000 to the number one student energy project in the nation. The prize in 2009 attracted 113 student teams from 40 different American universities with projects that ranged from insulation using husks to new solar technology.

In an environment in which capital efficient investment opportunities are on the rise, the relative lack of smart water investments speaks volumes about the perceived barriers to entry in the water utilities market. For many venture capitalists, the mere mention of “munis” by entrepreneurs will result in immediate concern regarding the penetration of this notoriously challenging customer base.

Like other cleantech sectors, investing in water treatment technologies brings with it long development cycles and potentially large capital requirements (think of the proverbial Valley of Death) that become uncomfortable for VCs and their funding model. While innovation in treatment technologies will continue to emerge, IT-based technologies that create efficiencies in our existing water systems present VC-friendly and high-impact solutions for water utilities.

As we put the finishing touches on the agenda for Cleantech Forum San Francisco, I wanted to tell you about the great events we have planned outside the main agenda. I am really excited about all the opportunities we’ll have to mingle with entrepreneurs, see the Bay Area, and experience new technologies hands-on.

In addition to the events listed below, we are putting together an amazing outdoor all-electric vehicle car show to showcase the latest EVs and charging stations. Drop me a note if you would like to get involved through providing a vehicle, charging stations or sponsorship.

Networking Events, Parties and Other Fun Stuff at Cleantech Forum San Francisco:

Explore the scenes and sights of San Francisco with a Cleantech Tour of the Bay Area. This hands-on tour of the San Francisco area will allow you to see and meet local cleantech entrepreneurs in action, and get a sneak peek at the City of San Francisco’s upcoming cleantech incubator.

While the geographic concentration of startup companies involved in the smart grid market mirrors typical patterns for venture capital – with California, Massachusetts, and New York home to the vast majority of young companies – 30 of 50 states are home to the headquarters of at least one of the companies on our top list.

This chart shows the total count of companies in each smart grid sector and the percentage of companies located in “Venture States” (CA, MA, NY). While home energy management and communications companies are localized in these high-venture states, within other categories companies are headquartered all over the US.

Each week our research team tracks cleantech transactions across the globe. This week we recorded 20 venture deals, 5 fund announcements, 17 M&As and 4 IPO related announcements. Below are some of the highlights. Cleantech Group subscribers can see the full roundup of all the deals here.

VC, private company and corporate investments

Over $215 million was raised by 14 cleantech companies globally. The two largest deals were:

California-based Fulcrum BioEnergy, a developer of technology for converting municipal solid waste into ethanol, raised $75 million in Series C financing from Rustic Canyon Partners, U.S Renewables Group, and other investors. The investment will allow the company to move forward with the construction of a $120 million garbage-to-ethanol plant.

India-based Kiran Energy, a developer of solar power projects, reportedly raised approximately $30 million from investors New Silk Route, Bessemer Ventures, and Argonaut Ventures. The company is in advanced stages of talks with different distributors to form JVs and plans to achieve 200 MW capacity in the next three years.

Funds

Announcements were made by 5 funds looking to raise over $1.3 billion. The top 2 were:

GE, ConocoPhilips and NRG Energy agreed to form a joint venture fund called Energy Technology

Each week our research team tracks cleantech transactions across the globe. This week we recorded 14 venture deals, 6 fund announcements, 24 M&As and 4 IPO related announcements. Below are some of the highlights. Cleantech Group subscribers can see the full roundup of all the deals here.

VC, private company and corporate investments

Over $310 million was raised by 14 cleantech companies globally. The two largest deals were:

UK-based Plastic Logic, a developer of plastic semiconductors, raised $200 million in equity financing and $100 million in partial guarantees for debt financing from Rusnano, a state-owned Russian nanotech corporation, and Oak Investments. Rusnano will also invest an additional $400 million in equity and debt financing over the next few years. The investment will fund Plastic Logic’s high-volume facility in Dresden, Germany, and maintain its research and development operations in the UK, as well as fund a plastic display production facility in Zelenograd, Russia’s Silicon Valley.

Australia-based EnviroMission, a developer of solar tower renewable energy technologies, raised $29.8 million in debt and equity from AGS Capital Group. The investment will be used for site-specific, front-end engineering and design for its Solar Updraft Tower development in the United States.

We at Cleantech Group have a keen interest in lighting, as our readers have likely noticed from our research work (clients only) and blogging. This interest is motivated, in part, by our client and subscriber base who tend to be interested in some combination of the following:

How innovation is changing the industry

Who are the startups/investors/large existing lighting companies able to capitalize on these innovations

How to conceptualize or segment the industry in a way that helps to make better sense of future innovations or companies

We will address these issues in more detail in a forthcoming research brief on lighting. But one “quick and dirty” approach that has helped our clients better understand the industry is to think of lights as an asset with a lifetime cost. The industry uses levelized cost of energy (LCOE) to make decisions about the present value of the total cost to build and operate a power plant over its economic life. Similarly, lights are also an asset that necessitates variable costs to build, operate, and dispose.

Indeed, the idea of lifetime cost is a key driver of innovation in lighting. Incandescents – the least efficient and oldest type of electric lights …

Earlier this month, ABB announced a $10 million investment in Electric Vehicle Supply Equipment (EVSE) vendor, ECOtality. As part of the agreement, ABB becomes the preferred supplier to ECOtality’s power electronics and component parts in North America. In addition, ABB will work with ECOtality in developing their Blink EV charging network, including the customer-facing web portal and back-end billing infrastructure. Certainly, the EVSE market is expected to explode as electric vehicles become more prolific on our roadways. But did ABB make the investment into ECOtality only because of its leadership in the EVSE market or is there more than meets the eye? In other words, for a company that makes transformers, is the market for electrical grid infrastructure upgrades even bigger than the thousands of Blink charging stations?

But before we answer that question, let’s not take anything away from the impressive achievements ECOtality has made in a few years. ECOtality is the project manager of the ambitious EV Project, a $230 million project that touches 8,300 residential and nearly 7,000 commercial chargers for 5,700 LEAF and 2,600 Volt models (8,300 cars total). This project is funded by the U.S. Department of Energy through a federal stimulus grant …

Cleantech venture investment was up by 28 percent compared to 2009 ($6.1 billion) making 2010 the second highest year for investment after 2008 ($8.8 billion).

The number of deals was 715, a new annual record, ahead of the previous high (624 deals) recorded in 2009. Venture investment in 4Q10 totaled $1.61 billion, down by 17 percent from 3Q10 ($1.95 billion) and the second consecutive quarterly decline.

As a category, Smart Grid showed strong growth in 2010, with $524 Million in global investment and 43 deals – both record highs for the smart grid sector.